Pa. Official: Corruption Led to Harrisburg's Money Woes

Harrisburg’s financial crisis is the result of years of schemes, scams, and corruption, said a state-appointed receiver David Unkovich, who is working to implement a plan to pay down the Pennsylvania capital’s multi-million dollar debt, according to the Patriot-News.

“The city has been mismanaged for 20 years,” said Unkovich, testifying Wednesday at a hearing to answer a lawsuit filed over the plan. “It’s all a house of cards, and now the house of cards is coming down.”

The state is handling Harrisburg’s finances, after city leaders last October filed for bankruptcy protection when Harrisburg failed to pay its debts on an unprofitable trash-to-energy incinerator conversion.

A commonwealth court judge approved the state’s plan for reducing the incinerator debt and balancing the capital’s budget on March 9, over Harrisburg officials’ protests.

Meanwhile, three community activists, hoping to block the plan, named Unkovich and Gov. Tom Corbett in a lawsuit, claiming Unkovich’s appointment itself is unconstitutional and the state’s recovery proposal works against Harrisburg’s black residents.

According to its bankruptcy filing, Harrisburg needs $310 million to make bond payments, restructure debt, and repay its home county and Hamilton, Bermuda-based insurer Assured Guaranty Municipal Corp., which made the payments the city stopped making on the waste-to-energy facility.